Reddit (NYSE:RDDT) Stock Price Down 4.1% - Here's What Happened

Key Points

• Reddit shares fell 4.1% in midday trading, dropping to as low as $190.80 before last trading near $194.90, on volume far below normal.
• Despite the dip, analysts remain generally positive: Reddit has a “Moderate Buy” consensus with an average price target of $231.14, though a few firms recently downgraded the stock or assigned more cautious ratings.
• The company’s latest earnings were strong, with EPS of $1.01 and revenue of $663.41 million, both beating estimates and showing 69.1% year-over-year revenue growth.

Reddit Inc. (NYSE:RDDT - Get Free Report) shares traded down 4.1% during mid-day trading on Wednesday . The company traded as low as $190.80 and last traded at $194.8980. Approximately 480,315 shares were traded during mid-day trading, a decline of 91% from the average session volume of 5,099,776 shares. The stock had previously closed at $203.27.

Wall Street Analyst Weigh In

A number of research analysts have weighed in on RDDT shares. Raymond James Financial set a $180.00 price objective on shares of Reddit and gave the company a "market perform" rating in a research note on Friday, May 1st. Wall Street Zen cut shares of Reddit from a "buy" rating to a "hold" rating in a research report on Sunday, May 10th. Zacks Research downgraded shares of Reddit from a "strong-buy" rating to a "hold" rating in a report on Wednesday, June 3rd. Oppenheimer restated an "outperform" rating and set a $225.00 price target on shares of Reddit in a research report on Friday, May 1st. Finally, Needham & Company LLC reiterated a "buy" rating and issued a $300.00 target price on shares of Reddit in a research note on Wednesday, June 24th. Eighteen investment analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the company. According to data from MarketBeat.com, Reddit currently has an average rating of "Moderate Buy" and a consensus price target of $231.14.

Reddit Trading Down 1.3%

The stock's fifty day moving average price is $171.18 and its 200 day moving average price is $170.15. The stock has a market cap of $38.63 billion, a P/E ratio of 57.33 and a beta of 1.93.

Reddit (NYSE:RDDT - Get Free Report) last posted its quarterly earnings data on Thursday, April 30th. The company reported $1.01 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.62 by $0.39. The company had revenue of $663.41 million during the quarter, compared to the consensus estimate of $607.74 million. Reddit had a net margin of 28.60% and a return on equity of 25.48%. The firm's revenue was up 69.1% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.13 EPS. On average, analysts anticipate that Reddit Inc. will post 4.83 earnings per share for the current year.

Insider Activity

In related news, CAO Michelle Marie Reynolds sold 808 shares of the stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $200.00, for a total transaction of $161,600.00. Following the transaction, the chief accounting officer owned 15,060 shares of the company's stock, valued at approximately $3,012,000. This trade represents a 5.09% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, COO Jennifer L. Wong sold 39,166 shares of the company's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $176.94, for a total transaction of $6,930,032.04. Following the sale, the chief operating officer owned 1,050,339 shares of the company's stock, valued at approximately $185,846,982.66. The trade was a 3.59% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 208,308 shares of company stock valued at $35,005,140. Corporate insiders own 28.48% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the business. Truist Financial Corp grew its position in shares of Reddit by 67.7% during the 4th quarter. Truist Financial Corp now owns 15,659 shares of the company's stock valued at $3,600,000 after acquiring an additional 6,321 shares during the period. Swiss Life Asset Management Ltd increased its position in Reddit by 63.2% in the fourth quarter. Swiss Life Asset Management Ltd now owns 32,003 shares of the company's stock worth $7,357,000 after buying an additional 12,398 shares in the last quarter. Calamos Advisors LLC purchased a new position in shares of Reddit during the 4th quarter valued at about $2,299,000. Handelsbanken Fonder AB grew its stake in shares of Reddit by 22.9% during the 4th quarter. Handelsbanken Fonder AB now owns 37,000 shares of the company's stock valued at $8,505,000 after acquiring an additional 6,900 shares during the period. Finally, Berkshire Capital Holdings Inc. grew its stake in shares of Reddit by 326,400.0% during the 4th quarter. Berkshire Capital Holdings Inc. now owns 32,650 shares of the company's stock valued at $7,505,000 after acquiring an additional 32,640 shares during the period.

About Reddit

Reddit is an online social news aggregation, discussion and content-sharing platform organized around user-created communities called "subreddits," each focused on a particular topic or interest. Registered users submit links, text posts, images and video, and community members vote and comment to surface popular content. The site is accessed via its web platform and mobile apps for iOS and Android, and it supports live events such as Ask Me Anything (AMA) sessions and community-driven discussions.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is headquartered in San Francisco and serves a global audience with particularly large user bases in the United States and other English-speaking markets.

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